The Guangzhou Intellectual Property Court (the GZ IP Court) recently made the first-instance judgement (not effective yet) for the two zipper patent infringement cases in which we r...
Introduction The two patents involved, namely, Method for Decoding Based on Intra Prediction and Apparatus for Decoding Based on Intra Prediction, are standard patents in the worldl...
Supreme Court Releasing 14 Typical Cases Concluded by Beijing, Shanghai and Guangzhou Intellectual Property Courts

The Supreme People’s Court held a press conference this morning, in which it made an overall report on the establishment and operation of Beijing, Shanghai and Guangzhou Intellectual Property Courts, and issued 14 typical cases concluded by the three courts.

Case 1
Administrative dispute over invalidation of patent: Anyang Xiangyu Medical Equipment Co, Ltd vs. Patent Reexamination Board and Cui Xuewei

1. Case Brief
Xiangyu Company filed a request for invalidation of the invention patent named “multifunctional moxibustion instrument” (Patent No.: 94119284.9) owned by Cui Xuewei to the Patent Reexamination Board. The Patent Reexamination made an administrative decision after examination, sustaining the validity of the disputed patent. Xiangyu Company was not satisfied with the decision and filed an administrative lawsuit to Beijing Intellectual Property Court.

2. Ruling of the Court
Beijing Intellectual Property Court held that: claims of the disputed patent had clear scope of protection and were supported by the description, and the amendments made to the application documents of the disputed patent by the patentee did not go beyond the scope of disclosure of the original description and the claims; moreover, the disputed patent possessed inventiveness and complied with relevant regulations of the Chinese Patent Law and the Implementation Regulations of the Chinese Patent Law. Therefore, the court made a ruling and sustained the sued decision. As none of the parties appealed, the ruling has entered into force.

3. Significance
Moxibustion is one of the therapeutic methods of traditional Chinese medicine. The disputed patent combines traditional moxibustion with electromagnetic technique and forms a moxibustion therapeutic apparatus that can realize functions of self-heating and automatic temperature control. It has rather high application value in relevant traditional Chinese medicine and draws extensive attention of people in the field of medical apparatus and instruments of traditional Chinese medicine. This case involves many grounds for the request for invalidation of a patent, including whether or not the scope of protection of a claim is clear, whether or not a claim can be supported by the description, whether or not the amendments made to the application documents of the disputed patent by the patentee go beyond the scope of disclosure of the original description and the claims, and whether or not the disputed patent possess inventiveness. The ruling of this case made sufficient interpretations of arguments of the parties point by point and protected interests of the patentee in accordance with the law.

Case 2
Administrative dispute over invalidation of patent: Zhengzhou Chunquan Energy-saving Co., Ltd. vs. Patent Reexamination Board and the Third Party Beijing HaiLin Energy Technology Inc. etc.

Beijing HaiLin Company filed a request for invalidation of the invention patent named “method and apparatus for recognizing multi-speed motor gear based on voltage mutual inductance technology” (Patent No.: 200810231195.5) of Zhengzhou Chunquan Company. The Patent Reexamination Board announced the disputed patent wholly invalid according to Article 22.3 of the Chinese Patent Law. Zhengzhou Chunquan Company was not satisfied with the decision and filed an administrative lawsuit to Beijing Intellectual Property Court.

2. Ruling of the Court
Beijing Intellectual Property Court held after trial that all claims of the disputed patent possessed inventiveness and the relevant determination of the Patent Reexamination Board was incorrect, therefore made a ruling, revoking the sued decision and ordering the Patent Reexamination Board to remake a decision. As none of the parties appealed, the ruling has entered into force.

3. Significance
This case involves an invention patent of electronic field with complicated technical problem. The court carefully examined the relevant techniques, trialed the inventiveness of the disputed patent by strictly applying the three-step method in determining inventiveness, and corrected the incorrect decision of the Patent Reexamination Board. The ruling of this case timely saved an invention patent that can bring considerable revenue to the enterprise, and protected interests of the patentee in accordance with the law.

Case 3
Administrative dispute over invalidation of trademark: Kailuan Group vs. Trademark Review and Adjudication Board and the Third Party Zhang Hongbin

1. Case Brief
Kailuan Group filed a request for invalidation of No. 5667073 “Kailuan” trademark applied for registration by the Third Party Zhang Hongbin, claiming that the disputed trademark infringed its right of enterprise name “Kailuan”, Zhang Hongbin committed malicious registering action and he did not actually use the disputed trademark. The Trademark Review and Adjudication Board held that the evidences provided by Kailuan Group did not involve services in beauty salons or public bathrooms, thus cannot prove that Kailuan Group had used “Kailuan” as the trade name or trademark on services in beauty salons or public bathrooms or the like designated by the disputed trademark and possessed certain popularity before the registration application of the disputed trademark was filed. Therefore, the Trademark Review and Adjudication Board made a decision, sustaining the registration of the disputed trademark. Kialuan Group was not satisfied with the decision and filed an administrative lawsuit to Beijing Intellectual Property Court.

2. Ruling of the Court
Beijing Intellectual Property Court held after the trial that the registration of the disputed trademark “Kailuan” damaged the prior right of trade name of Kailuan Group, and the determination of the Trademark Review and Adjudication Board was incorrect and shall be corrected. The court therefore made a ruling, revoking [2014] No. 71444 Decision Concerning the Request for Invalidation of No. 5667073 “Kailuan” Trademark of the Trademark Review and Adjudication Board and ordering the Trademark Review and Adjudication Board to remake a decision. None of the parties appealed after the verdict, and the ruling has entered into force.

3. Significance
This is an administrative dispute over invalidation of trademark, with the right of claim being “an application for the registration of a trademark shall not create any prejudice to the prior right of another person” and the involved prior right being prior right of trade name. The ruling of this case analyzed and discussed the element of “create prejudice to the prior right of another person” from aspects of the forming time of the trade name of the plaintiff (the trade name “Kailuan” formed in 1912), the awareness of the trade name of the plaintiff (Kailuan Croup is a Fortune Global 500 company and its trade name has a popularity in both China and abroad), the comparison between the business scope of the plaintiff and the approved use of services of the disputed trademark, possibility for confusion, the awareness of the registrant of the disputed trademark towards the trade name of the plaintiff, and the actual use of the disputed trademark, and determined that the registration of the disputed trademark damaged the prior right of trade name of Kailuan Group and shall be invalidated. The ruling of this case reflects the judicial orientation of protecting rights and interests of famous brand, preventing malicious registration of trademarks and maintaining the honest competition in the market.

Case 4
Administrative dispute over review of trademark rejection: Tongjitang (Guizhou) Pharmaceutical Co., Ltd. vs. Trademark Review and Adjudication Board

1. Case Brief
Tongjitang Company submitted the application for registration of the combination trademark “Tongjitang founded in 1888 and pattern” to the Trademark Office of the State Administration for Industry and Commerce. The Trademark Office and the Trademark Review and Adjudication Board rejected the application for registration of the disputed trademark respectively on the grounds that the disputed trademark was similar to No. 3178271 “Tongji and pattern” trademark (i.e., Reference Mark 1) and No. 3574839 “Tongji” trademark (i.e., Reference Mark 2). Tongjitang Company was not satisfied with the decisions and filed an administrative lawsuit to Beijing Intellectual Property Court.

2. Ruling of the Court
Beijing Intellectual Property Court held after the trial that after overall consideration of the awareness of the prior basic trademark No. 1093180 “Tongjitang” trademark of Tongjitang Company, the actual use of the disputed trademark, the degree of similarity between the disputed trademark and the basic trademark and the degree of difference with the two reference marks, it can be determined that coexistence of the disputed trademark and the two reference marks in the market would not lead to confusion or misunderstanding of the relevant public, and the disputed trademark did not constitute similar trademark on the identical or similar goods. The court therefore made a decision, revoking the sued decision and ordering the Trademark Review and Adjudication Board to remake a decision.

3. Significance
This case clarifies that in determining the similarity of trademarks, the extending relationship between the basic trademark of the same subject and the disputed trademark under certain conditions shall be taken into consideration, and probes into the factors to be considered in determination of the extending relationship. After overall consideration of the awareness of the prior basic trademark of Tongjitang Company, the similarity between the disputed trademark and the basic trademark, the similarity between the goods designated by the disputed trademark and the basic trademark, the actual use of the disputed trademark and the difference between the disputed trademark and two reference marks, the court finally determined that the business reputation of the basic trademark can be extended to the disputed trademark, thus the relevant public can distinguish the disputed trademark from the two reference marks. The ruling of this case has great significance for reasonably protecting interests of owners of well-known trademarks.

Case 5
Dispute over infringement of exclusive right to use registered trademark: Qian Cheng vs. Beijing Concert Hall

1. Case Brief
Beijing Concert Hall held a series of performances in the name of “Open the Door to Music”. Qian Cheng was the former general manager of Beijing Concert Hall; he applied for registration of the work mark “Open the Door to Music” during his tenure. After leaving the company, Qian Cheng filed a lawsuit against Beijing Concert Hall, claiming that Beijing Concert Hall used the mark “Open the Door to Music” in relevant business activities without authorization and infringed his exclusive right to use the registered trademark, and demanding Beijing Concert Hall to cease the infringing acts, offer an apology, and pay a compensation of 40,000 yuan for economic loss and reasonable expense.

2. Ruling of the Court
Xicheng District People's Court of Beijing held in the first instance that: before registration application was filed by Qian Cheng, Beijing Concert Hall had already used a trademark similar to the registered trademark on same goods and obtained certain popularity prior to the applicant of the disputed trademark; as the holder of the exclusive right to use registered trademark, Quan Cheng had no right to prevent Beijing Concert Hall’s continuous use of the disputed trademark; the claims of Qian Cheng lacked in factual and legal basis, thus was not supported by the court. Therefore, Xicheng District People’s Court of Beijing rejected the claims of Qian Cheng. Qian Cheng was not satisfied with the first instance judgment and appealed. Beijing Intellectual Property Court held in the second instance that: in the series of performances and advertisements using the mark “Open the Door to Music”, the asserted subject had always been Beijing Concert Hall, and a rather fixed connection had been established between the mark and Beijing Concert Hall. The right of defense by prior use of the trademark of Beijing Concert Hall was established, and its use of “Open the Door to Music” did not constitute the act of infringement. The court therefore made a ruling, rejecting the appeal and affirming the first instance judgment.

3. Significance
This case involves the application of law of the defense right of prior use of the trademark as provided by the amended Trademark Law. The court deeply analyzed the application conditions related to the defense right of prior use in the amended Trademark Law, probed into questions including the prior trademark use, awareness of a mark and the subjective attitude of the user, and made sufficient reasoning. The ruling of this case protected the brand “Open the Door to Music” that Beijing Concert Hall used for almost 12 consecutive years in accordance with the law, and reasonably balanced interests of prior user of trademark and holder of the registered trademark.

Case 6
Dispute over unfair competition: Beijing IQIYI Science & Technology Co., Ltd. vs. Beijing Jikejike Technology Co., Ltd.

1. Case Brief
Jikejike Company is the manufacturer and distributor of “Hiwifi” router. Users of “Hiwifi” router can block the pre-video advertisements on the Iqiyi website by downloading and installing the plugin “Block Video Ads” from the cloud platform of Hiwifi and surfing the Internet by “Hiwifi” router. Iqiyi Company claimed that “Hiwifi” router manufactured and distributed by Jikejike Company filtered the pre-video advertisements on “Iqiyi” website through installing the plugin “Block Video Ads” and constituted the act of unfair competition, therefore filed a lawsuit, requesting the court to order Jikejike Company to cease the act of unfair competition, eliminate influences and pay a compensation of 2,100,000 yuan for its loss.

2. Ruling of the Court
Haidian District People's Court of Beijing held in the first instance that Jikejike Company’s act of directly interfering with the business practice of Iqiyi Company by using the plugin “Block Video Ads” for commercial advantages went beyond the scope of fair competition, violated the principle of good faith and acknowledged business ethics, and constituted the act of unfair competition. Jikejike Company was not satisfied with the first instance judgment and appealed. Beijing Intellectual Property Court held in the second instance that: operators shall abide by corresponding regulations when providing services to network users and shall not acquire benefits at the cost of effecting other competitors’ legitimate business model. Jikejike Company provided services to users in the way of forcibly changing the business model of Iqiyi Company, damaged the legitimate interests of Iqiyi Company, and would certainly make Iqiyi Company difficult to sustain for difficulties in paying the high copyright royalty, and finally, the interests of network users would be adversely affected. The act of Jikejike Company lacked in legitimacy. The court therefore made a ruling, rejecting the appeal and affirming the first instance judgment.

3. Significance
In recent years, disputes of competitions under the environment of network grow increasingly fierce, and new types of acts of unfair completion emerge in endlessly, which create difficulty to legal determination. The court held that the sued act constituted unfair competition through analyzing the subjective malice of the network operator, the infringement of the sued act to other’s lawful business model and the effect to the ultimate interests of consumers. The ruling of this case has guiding significance to the determination of competitive relation under the environment of network and the judgment of legitimacy of competitive behavior.

Case 7
Dispute over copyright infringement and unfair competition: Beijing Locojoy Technology Co., Ltd. vs. Beijing Kunlun Lexiang Network Technique Co., Ltd. and others

1. Case Brief
Locojoy is the copyright owner of games on mobile terminals I am MT on line and I am MT 2. The aforementioned games are adapted from a series 3D animation I am MT. Locojoy Company enjoys exclusive authorized right of use to the name of games and names of characters, and enjoys copyright of work of art to the character images. Locojoy claimed that Kunlun Lexiang Company and others used similar names and characters similar to the name of game, names of characters and character images of I am MT in the game Super MT without authorization and infringed its copyright; Kunlun Lexiang Company and others plagiarized the name of I am MT in the game Super MT, used publicity languages relevant to I am MT in the advertisement of Super MT and constituted the act of unfair competition, therefore filed a lawsuit.

2. Ruling of the Court
Beijing Intellectual Property Court held after the trial that: the game and characters of Locojoy did not constitute written works protected by the Chinese Copyright Law, the character images of the sued game did not constitute substantive similarity with those in Locojoy Company’s game, and the act of Kunlun Lexiang Company and others did not infringe the copyright of Locojoy Company; the game of Locojoy Company went online prior to the sued game and possessed certain popularity, Kunlun Lexiang Company and others, which were also operators of mobile games, did not reasonably avoid the above names of game and characters of Locojoy Company, on the contrary, they adopted relevant approach of expression and conducted advertisements contrary to the fact, and constituted the act of unfair competition by using the  specific name of other’s famous service and making false propaganda without authorization. The court therefore made a ruling, ordering Kunlun Lexiang Company and others to cease the act of unfair competition and pay a compensation of more than 500,000 yuan for economic loss and 35,000 yuan for reasonable expense to Locojoy Company.

3. Significance
As an emerging culture industry, game on mobile terminals is the outcome of integration of culture and science and enjoys huge space of development and favorable market prospect. This case is a dispute over copyright and unfair competition involved with games on mobile terminals. This case was involved with complicated facts and various and difficult legal issues. The court analyzed in details various legal issues including whether or not short word groups of names of game and characters can form written works, copyright protection of adapted works, whether or not the name of game on mobile terminals can form the specific name of a famous commodity and the determination of false propaganda. On the aspect of shouldering of civil liability, the court fully considered factors including the market shares of the applicant and the subjective state of the sued infringer, protected the interests of the right holder of the game to the maximum, and struck the act of unfairly grabbing others’ interests in accordance with the law. This case clarifies the thinking and direction of the IP protection for games on mobile terminals and has demonstration effects on promoting the healthy development of the industry of games on mobile terminals.

Case 8
Dispute over trademark infringement: Burberry Limited vs. Chen Kai and Lu Qiumin

1. Case Brief
Burberry Limited is the holder of a series of registered trademark “BURBERRY” in Class 25 clothing. On March 20, 2012, the Public Security Bureau solved the criminal case of counterfeiting commodities bearing the aforementioned registered trademark by Chen Kai and Lu Qiumei, and asked Burberry Limited to assist in identifying the involved counterfeiting goods. On August 15, 2014, Burberry Limited filed this lawsuit, requesting the court to order the two defendants pay a compensation of 1,000,000 yuan for economic loss and reasonable expense. Two defendants Chen Kai and Lu Qiumei argued that Burberry Limited had been aware of the existence of the infringing act on March 20, 2012, and the lawsuit it brought in August 2014 went beyond the limitation of action.

2. Ruling of the Court
Yangpu District People's Court of Shanghai held in the first instance that the prosecution of Burberry Limited did not go beyond the limitation of action; the defendants Chen Kai and Lu Qiumei constituted the act of infringing Burberry Limited’s exclusive right to use trademark, and shall jointly pay a compensation of 150,000 yuan for economic loss and 15,000 yuan for reasonable expense to Burberry Limited. Lu Qiumei was not satisfied with the first instance judgment and appealed. Shanghai Intellectual Property Court rejected the appeal and sustained the first instance judgment.

3. Significance
This case relates to the determination of discontinuance of limitation of action. The ruling of this case clarifies the legal meaning of the fact of being aware that other’s infringing act has entered criminal procedure of prosecution and assisting in investigation on the request of investigation department to limitation of action. The court held that the aforementioned fact had doubles meanings for the right holder: one was having legal consequence for the counting of limitation of action, as the right holder was aware that his right had been infringed; the other was having legal consequence for the discontinuance of limitation of action, as the right holder had the reason to believe that his civil right can be protected by criminal investigation, and whether or not the sued act constituted infringement relied on the determination of the effective criminal judgment. This determination reasonably defines the issue of discontinuance of limitation of action and provides better guarantee to the right holder for safeguarding his right in accordance with the law.

Case 9
Dispute over appeal of trademark infringement and false propaganda: KDF Distribution (Shanghai) Co., Ltd. vs. Aquatherm Pipe System (Shanghai) Co., Ltd.

1. Case Brief
KDF Company is the trademark owner of word mark “洁水”. Before July 1, 2013, KDF Company enjoyed the exclusive selling right in China of water pipe products of the third party Aquatherm GmbH. After July 1, 2013, the cooperation agreement of KDF Company and Aquatherm GmbH terminated, and Aquatherm Company became the new agent of products of Aquatherm GmbH in China. Before July 1, 2013, the trademark “洁水” registered by KDF Company was only used in promoting and marketing the products of Aquatherm GmbH. After July 1, 2013, KDF Company continued to hold the trademark “洁水” and used the trademark to promote the pipe products of other manufacturers. Aquatherm Company authorized Ousu Company to exclusively market the products of Aquatherm GmbH in Shanghai area. Aquatherm Company and Ousu Company used in their promotional articles and leaflets publicity languages including “former German洁水, now German 阔盛”, “German 阔盛 (former Germany洁水) – constant quality” and the like, and expressions including “former agent promoted with German ‘洁水’ in China, from July 1, German manufacturer officially use Chinese name ‘阔盛’ for the promotion in Chinese market” and “the former Chinese name ‘洁水’ is held by the former agent and now has no connection to German 阔盛, Aquatherm GmbH or its products”. KDF Company claimed that Aquatherm Company and Ousu Company constituted trademark infringement and false propaganda by the act of using the aforementioned publicity languages, and requested the court to order the two defendants to cease the act of trademark infringement and false propaganda and pay a compensation of 50,000,000 yuan in total for economic loss and reasonable expense.

2. Ruling of the Court
Xuhui District People's Court of Shanghai rejected all claims of KDF Company in the first instance judgment. KDF Company was not satisfied with the judgment and appealed. Shanghai Intellectual Property Court held in the second instance that: due to the fact that the trademark “洁水” was used to promote products of Aquatherm GmbH, it was necessary for Aquatherm Company and Ousu Company to inform consumers in their propaganda that products designated by the trademark “洁水” had changed; when using of the trademark “洁水”, the two companies was subjectively in good faith, and the use did not go beyond the reasonable limitation and would not lead to confusion of the consumers concerning the source of the products, therefore belonged to fair use of the trademark. The publicity languages used by Aquatherm Company and Ousu Company were indeed inaccurate in wording, but did not have misleading effects, thus did not constitute false propaganda in the Anti-unfair Competition Law. The court therefore rejected the appeal and sustained the first instant judgment.

3. Significance
This case relates to the standard of determination of fair use of trademark and false propaganda. The court held that the sued act belonged to the fair use of trademark from aspects of the subjective intent and way of use of the defendants in using the trademark, and the possibility of confusion. In determining the sued act of false propaganda, the court emphasized that publicity language shall be interpreted as a whole, and the determination shall be made by combining the factors including the common attention and existing cognitive experience of relevant public. The ruling of the case has certain referential significance for the trial of similar cases.

Case 10
Dispute over appeal of copyright infringement: Shanghai Picasso Art Collection Co., Ltd. vs. Shanghai Art Imagine Stationery Co., Ltd. and others

1. Case Brief
Picasso Company’s website homepage has dark red background, white starlight dynamic effect, bell magic music and background music. Picasso Company found out that Art Image Company and Shanghai Europe Crocodile Stationery Co., Ltd. plagiarized and counterfeited its website and infringed its copyright, therefore filed a lawsuit, requesting the court to order Art Imagine Company and Europe Crocodile Company to cease the infringing act, eliminate influences and pay a compensation of 223,000 yuan for its losses.

2. Ruling of the Court
Minxing District People's Court of Shanghai held in the first instance that Art Imagine Company and Europe Crocodile Company infringed the website copyright of Picasso Company, and made the first instance judgment, ordering the two defendants to cease the infringing act and pay a compensation of 30,000 yuan for economic loss and reasonable expense to Picasso Company. Art Imagine Company and Europe Crocodile Company were not satisfied with the judgment and appealed. Shanghai Intellectual Property Court rejected the appeal and sustained the first instance judgment in the second instance.

3. Significance
This case involves whether or not the content arrangements of webpage constitute works in the meaning of copyright law. The court held that: although webpages of the disputed website contained many elements in the public domain, yet other than columns and structural elements, which were all presented in the website homepages of common enterprises, the homepage of the disputed website reflected unique conception in various aspects including the color of pictures, choice of content, ways of demonstration and layout and arrangement, presented certain effects of visual art and had originality and replicability, therefore formed works in the meaning of copyright law. The protection standard of copyright of webpage works determined by this case has certain referential significance to the trial of similar cases.

Case 11
Case of application of pretrial evidence preservation by Autodesk Inc. and Adobe Systems Incorporated

1. Case Brief
Autodesk Inc. and Adobe Systems Incorporated are two software enterprises; they believed that Shanghai Ablues Design Exhibition Co., Ltd. copied, installed and commercially use their series computer software including AutoCAD, Photoshop and Acrobat without authorization. As computers installed with illegal computer software were all inside of the site for business operation of Ablues Company, the applicants objectively cannot obtain relevant evidences; meanwhile, as the involved evidences were all computer software and relevant data, thus had intangibility and can be easily hidden or destroyed; evidences would be hard to obtain once they were transferred, hidden or destroyed, which would cause difficulty to the determination of relevant facts. Therefore the two applicants requested Shanghai Intellectual Property Court to proceed with pretrial evidence preservation.

2. Ruling of the Court
Shanghai Intellectual Property Court held after examination that the evidences the applicants applied to be preserved belonged to evidences might be destroyed or evidences would be difficult to obtain afterwards, and the applicants cannot collect the evidences for objective reasons, which met the conditions of pretrial evidence preservation. The court therefore made a ruling to conduct evidence preservation on relevant information of the aforementioned series software on computers and other equipment inside the site for business operation of the respondent. After the ruling of evidence preservation, Shanghai Third Intermediate People’s Court cooperated with relevant departments of Shanghai Intellectual Property Court, brought the institutional advantage of “merging work in one official” into full play, and successfully completed the pretrial evidence preservation.

3. Significance
This is the first case of pretrial evidence preservation for computer software since the establishment of Shanghai Intellectual Property Court. This case relates to preservation of relevant evidences in near 400 computers in a large-scale working place, and the preservation work is professional and complex. Shanghai Intellectual Property Court hired relevant technical experts to assist in the preservation, made thorough plan for the work of evidence preservation, formed workgroups including technical experts group, onsite counting group and field control group, and clarified the responsibility of each group and their cooperation. All groups operated normatively, orderly preserved the evidences, and successfully completed the preservation work. This case provided referential working method and thinking for exploring enforcement mechanism conformed to features of IP case, increasing linkage between enforcement and trial, enhancing efficiency and accuracy of execution of the ruling of preservation and protecting legitimate interest of the right holder.

Case 12
Dispute over trademark infringement: Chanel Co., Ltd vs. Wen Daxiang and Guangzhou Kai Xuan Hotel Co., Ltd.

1. Case Brief
Chanel Company is a joint-stock company incorporated on August 27, 1954 and one of the worldwide renowned luxury brands. It is the right holder of figurative marks “” and “” and word mark “CHANEL” with designated goods in Class 25 “clothing, footwear, headgear, scarf, swimsuit”. Huameida Hotel, the branch company of Kai Xuan Hotel Company, signed a contract of tenancy of a store with Wen Daxiang, leased No.2 Store in the west corridor of the first floor of Huameida Hotel to Wen Daxiang for the use of selling clothing and leather ware, and agreed that Wen Daxiang would not sell fake or inferior quality commodity in the store. Chanel Company believed that commodities sold by Wen Daxiang, including footwear and wallet, used identifications that were same to its registered trademark and infringed its exclusive right to use the registered trademark, therefore filed a lawsuit against Wen Daxiang, Kai Xuan Hotel Company and Huameida Hotel, requesting the court to order the three defendant to cease the act of infringement and jointly pay a compensation of 300,000 yuan for economic loss and reasonable expense.

2. Ruling of the Court
Yuexiu District People’s Court of Guangzhou held in the first instance that Wen Daxiang infringed the exclusive right to use registered trademark of Chanel Company and shall bear the civil liability of ceasing the infringement and paying the compensation, yet Kai Xuan Hotel Company and Huameida Hotel did not constitute infringement. Chanel Company was not satisfied with the judgment and appealed. Guangzhou Intellectual Property Court held in the second instance that: after overall consideration of brand awareness of the involved trademark, the position of Huameida Hotel as a high-end starred hotel, the special relationship between the hotel and the store showed on the contract and the long-term repeated infringement of Wen Daxiang, Huameida Hotel shall bear rather high duty of care for the involved counterfeiting store. Moreover, the counterfeiting behavior of Wen Daxiang was evident and could be found out by Huameida Hotel with just a little attention. Huameida Hotel turned a blind eye to Wen Daxiang’s infringing act to the involved trademark, indulged the infringing act and constituted act of assisting in infringement, thus shall bear joint and several liability with Wen Daxiang. The court therefore amended the judgment, ordering Wen Daxiang, Huameida Hotel and Kai Xuan Hotel Company to jointly pay a compensation of 50,000 yuan to Chanel Company for economic loss and reasonable expense.

3. Significance
In recent years, many rental stores in garment markets and hotels sell counterfeiting commodities. Generally, the trademark owner will sue the store proprietor, the store lessor and the manager together as defendants, requesting them to bear joint and several liability. Under such circumstances, how to determine the liability of the store lessor and the manager is very important. In this case, the court considered the awareness of the right holder’s trademark, whether or not the infringing act was evident enough and the specific relationship between the lessor and the store proprietor in determining whether or not the store lessor know or should know the infringing act of the store proprietor, and reasonably determined the duty of care of the store lessor in accordance with the specific conditions. The ruling of this case probes into the conditions for the store lessor and manager to constitute the act of assisting in infringement, and has guiding significance for the protection of legitimate interests of famous brands.

Case 13
Dispute of copyright infringement: Sun Lijuan vs. Kuaishang Fashion (Guangzhou) Co., Ltd. and Guangzhou Urban Revivo Co., Ltd.

1. Case Brief
Sun Lijuan published the works of art named “Allegedly – Giraffe is the Expert of Loneliness” on Zcool website on January 12, 2011. In March 2011, the aforementioned works of Sun Lijuan won the first prize in “Hongmen Contest of Creative T-shirt Patterns”. Sun Lijuan believed that Kuaishang Company and Urban Revivo Company used the involved works of art on one-pieces with half sleeves that they manufactured and merchandised together, and constituted infringement to her copyrights including the right of signature, the right of reproduction and the publishing right. She therefore filed a lawsuit, requesting the court to order the two defendants to cease the infringement, pay a compensation of 250,000 yuan for economic loss and 20,000 yuan for reasonable expense, make written apology and eliminate influences of the infringement.

2. Ruling of the Court
Baiyun District People’s Court of Guangzhou held in the first instance that Kuaishang Company and Urban Revivo Company used Sun Lijuan’s works of art without authorization, thus formed copyright infringement; yet as it was difficult to indicate the writer in works used on garment, it shall not be determined objectively that the two defendants infringed Sun Lijuan’s right of signature. The court therefore make the first instance judgment, ordering the two defendants to cease the infringement, destroy the infringing products in their inventory and on the market, and jointly pay a compensation of 30,000 yuan to Sun Lijuan for economic loss and reasonable expense. Sun Lijuan was not satisfied with the judgment and appealed. Guangzhou Intellectual Property Court held in the second instance that it was a common occurrence in the field of costume designing and manufacturing to indicate the writer’s name on garments bearing works of art of famous illustrators, and this case did not belong to circumstances where the writer’s name cannot be indicated due to the feature of the works’ use pattern; Kuaishang Company and Urban Revivo Company infringed Sun Lijuan’s right of signature. Considering the certain awareness of the involved works, obvious subjective malice of Urban Revivo Company and the large scale of operation of Kuaishang Company, amount of compensation determined in the first instance was obviously low. The court therefore amended the judgment and ordered Kuaishang Company and Urban Revivo Company to apologize to Sun Lijuan and pay a joint compensation of 80,000 yuan for economic loss.

3. Significance
This case involves determination of infringement to the writer’s right of signature in the field of costume designing. On the basis of investigating the trade practice in the field of costume designing and the common knowledge of life, the court determined that indicating the writer’s name when using other’s works of art did not have objective limitation or damage the overall sense of beauty of the garment pattern, and that it was a common occurrence to indicate the illustrator’s name on garments. The ruling of this case protects the writer’s right of signature in accordance with the law and has significance for standardizing the use of copyright in the field of costume designing.

Case 14
Case of application for preservation of act by Blizzard Entertainment Company and Shanghai Wangzhiyi Science and Technology Development Limited Company

1. Case Brief
Blizzard Entertainment Company is the copyright owner of series games World of Warcraft, and Wangzhiyi Company is the exclusive operator of the games in China mainland. The two plaintiffs believed that the sued game All People Warcraft (former name: Tribal Chief Saar), which was developed by Qiyou Company, exclusively operated by Fenboshidai Company and provided of download by Dongjing Company, infringed their copyright of works of art and constituted act of unfair competition by using the specific name and decoration of other’s famous game commodity without authorization and false propaganda. Blizzard Entertainment Company and Wangzhiyi Company applied for preservation of act when filing the lawsuit, requested the court to immediately forbid the three defendants’ sued infringing act, and provided equivalent cash guarantee of 100,000,000 yuan.

2. Ruling of the Court
Guangzhou Intellectual Property Court made a ruling after organizing a hearing of the parties, forbidding Qiyou Company from duplicating, publishing and spreading the sued game through information network, forbidding Fenboshidai Company from duplicating, publishing and spreading the sued game through information network and performing the disputed act of unfair competition, and forbidding Dongjing Company from spreading the sued game on its official website. After the ruling of the court, Qiyou Company and Dongjing Company voluntarily carried out the ruling, and Fenboshidai Company also carried out the ruling after supervision and interpretation of the court.

3. Significance
This is a case of application for preservation of act (i.e., preliminary injunction). Actively accept and examine the application for preservation of act and properly and effectively adopt methods of preservation of act concerning intellectual property have significant importance to enhance the promptness, convenience and efficiency of judicial remedy concerning intellectual property. Meanwhile, during the application for preservation of act, the court shall pay attention to balance interests of the applicant and the respondent, know accurately the application conditions of preservative measures and regulate the examination procedure. On one hand, the court shall satisfy the right holder’s legitimate need to promptly protect his right; on the other hand, it shall also prevent the right holder from abusing the regime of preservation of act to injure his competitor. During the examination of the application for preservation of act of this case, the court listened to opinions of both parties, considered the applicant’s guarantee, reasonably determined the measure and scope for preservation of act and well balanced the interests of both parties.

Date: September 9, 2015
Source: Supreme People’s Court

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